Trump threat: Can the US retake Panama Canal?

Can the US “crown thy good with brotherhood from sea to shining sea” (lyrics of “America the Beautiful”) by re-invading the Latin American nation to regain control over the short-cut between the Pacific and Atlantic?

Sure, the US has the firepower to carry out President Donald Trump’s stated threat to unilaterally reverse the international order and the “retake” the important waterway.

Legal agreements

There are legal agreements, however, that frame the current order.
In 1977, agreements signed under President Jimmy Carter transferred control of the canal to Panama on December 31, 1999 (Torrijos-Carter Treaties), establishing Panama’s full sovereignty over the canal and surrounding zone.

The Trump camp has cited Panama’s alleged treaty violations: First by overcharging US ships passing through, and by giving rights to operate part of the canal, including some of its ports, to Chinese-owned companies.
International commitment

Does the US today have compelling reasons to unilaterally go back on these agreements?

While reversing the decision would likely violate established treaties, undermine international trust and damage the US’s global credibility, the full extent of Trump’s resolve as 47th president is yet to be seen.
Panama invasion

The US military already invaded Panama once before.

On December 20, 1989, US forces descended upon Panama City to depose the de-facto ruler at that time, General Manuel Noriega, who was wanted by US authorities for racketeering and drug trafficking.
The military campaign, codenamed “Operation Just Cause”, concluded in late January 1990 with the surrender of Noriega.

US support for Panama’s independence
Some 87 years earlier, on November 4, 1903, US support secured the Declaration of Independence of Panama from Colombia.

In return, Panama signed the Hay-Bunau-Varilla Treaty three weeks later, granting the US sovereign rights over the inter-oceanic canal, which opened in 1914.

The US spent $375 million and used the best construction technology available at that time and to build the Panama Canal. That’s about $10.42 billion in 2025 dollars (assuming an annual inflation rate of 3.04 per cent). ​​
Trump wants to “take back” canal
Trump, in his campaign sorties and inaugural address on Monday, has railed against certain wrongs – especially overcharging by Panamanian authorities of US ships (including the US Navy) crossing the US-made channel.

He also suggested that the control of Chinese investors over the canal is unacceptable.

What would it take to retake the canal?

Military, moral and logistical challenges

Militarily seizing the canal would be a massive undertaking, requiring the deployment of significant forces, likely resulting in regional instability.

The US had invaded Panama once before.

Panama, however, is not a hostile state, making a military intervention hard to justify on any legal or moral grounds.

Diplomatic, legal concerns
The possibility of the US taking back the Panama Canal could be fraught with numerous legal, diplomatic, and geopolitical complications.

Any unilateral move by the U.S. to take control would severely strain diplomatic relations with Panama, a vital regional partner in Latin America.

Impact on US-China rivalry: China has significant influence in the Panama Canal due to leasing agreements with Chinese companies for port management. Any aggressive US move could escalate tensions with Beijing.

Broader international reaction: Such a move would likely face widespread condemnation from allies and adversaries, as it could be perceived as “neo-imperialism”.

Critical trade route

The Panama Canal remains a critical trade route, especially for US agricultural, manufacturing, and military logistics.

However, modern global shipping has diversified, and alternatives like the Suez Canal and Arctic routes are growing in relevance.
US security interests in ensuring the canal’s neutrality are already safeguarded under existing agreements.

Trump’s negotiating stance

Back to the question: Can the US retake Panama Canal?

Or, rather, should the US retake Panama Canal?

Currently, if Trump (or any US political figure) suggests revisiting the Panama Canal issue, it is likely rhetorical or part of a broader strategy.

He might use such statements to:

Criticise China’s Influence: Point out concerns over Chinese involvement in canal operations.
Leverage negotiations: Reduce charges for ships, especially US-registered ones, and frame the canal as part of broader discussions on trade or security policies in Latin America.

Appeal domestically: Use it as a populist talking point to galvanise supporters who view US sovereignty as paramount.

A question of resolve
Does President Trump and the American people have the resolve to make such as a bold move?

By reasserting US control over the Panama Canal, what would be the strategic considerations?

Is such a move even necessary?

While the canal is vital, its operations currently serve US and global interests effectively under Panamanian management.

Any rhetoric suggesting otherwise could be viewed in the context of domestic politics or broader negotiations rather than as a credible policy or military objective.

But with Trump at the helm, and given how he ordered US withdrawal from the WHO over funding issues on his Day 1 in office, anything can happen.